The period between Christmas and the end of January is one of the most important — and most neglected — windows for accounts receivable management. Businesses that conduct a structured review of their debtors ledger in early January consistently achieve better recovery outcomes than those that restart the collection cycle only when the business is fully operational.
Why January specifically
Several dynamics converge in January that make it an ideal recovery window:
- Debtors who have been using the holiday period to avoid contact are now reachable.
- The new calendar year creates a natural psychological reset — debtors are more likely to address outstanding obligations as part of "starting fresh."
- Many businesses pay outstanding invoices before the start of the new year as part of their own financial housekeeping, revealing which accounts are genuinely contested or unable to pay.
- Debts that have not been paid by the end of December have survived the pre-Christmas payment flurry — if a debtor was going to pay voluntarily, they usually have by now.
What the review should cover
A January review of the debtors ledger should address:
Accounts that were promised payment before Christmas
Any debtor who committed to payment before end of December should be contacted in the first week of January if payment has not arrived. A broken pre-Christmas promise is a strong indicator of financial difficulty or deliberate avoidance.
Accounts over 60 days
Any invoice that was more than 60 days overdue entering December and has not been resolved should be reviewed for external referral. The debt has now survived an entire holiday period without resolution — internal collection has run its course.
Payment plans that lapsed during the break
Payment plans with instalments scheduled during December sometimes lapse during the break. Contact these debtors immediately to confirm the arrangement is resuming or to renegotiate.
Debtors who may have closed over the break
Some businesses close permanently over the Christmas period — the holiday is used as cover for a cessation of trading. Check ASIC for any deregistrations or administration appointments that occurred during December for any of your significant debtors.
The cost of delay
Waiting until February or March to address December overdue accounts adds weeks of debt age. A debt that is 75 days old in January becomes 110 days old by mid-February if action is not taken. Recovery rates drop materially with each passing month in that range. January action is January advantage.
Refer your outstanding accounts to Merion in January — we prioritise January referrals to take advantage of the new-year contact window.